BP is expected to report a 22pc fall in underlying profits this week as its
fourth-quarter earnings suffer from the ending of the Russian joint venture
TNK-BP.

The oil major is set to say that profits fell to $17bn (£10.8bn) in 2012. Algeria and America are also likely to be in the spotlight as BP is reporting barely two weeks after the bloody end to the hostage crisis at its In Amenas jointly-run gas plant. Its trial is also due to begin over the Gulf of Mexico disaster.

Analysts expect BP’s fourth-quarter underlying profits to be $3.3bn, down from $5bn in the same period of 2011.

The oil major signed a landmark deal to sell its 50pc stake in TNK-BP in return for cash and Rosneft shares in October and so will be able to book just 21 days’ income for the quarter for a venture that contributed $1bn in net income the year before.

The impact of other asset sales will also weigh on earnings and BP is expected to be missing some high-margin oil production due to maintenance work.

Analysts will be attempting to strip out the impact of disposals to assess the health of the underlying business, with Deutsche Bank warning that, with so many “moving parts”, forecasting BP’s results was “more art than science”.

BP took a near-20pc stake in Rosneft through the TNK sale and investors will be looking to the chief executive, Bob Dudley, for reassurance that he will be able to help drive improvements at the Russian business which is controlled by the state. Last Friday Rosneft reported disappointing fourth-quarter results.

The identities of two BP representatives on the Rosneft board have yet to be revealed, while investors will want more guidance on a promised return of cash to shareholders using some of the $12.3bn proceeds of the TNK sale. This is expected after the deal is completed sometime in the first half of the year.

BP is unlikely to want to appear to have too much cash to spare until it has resolved the scale of liabilities over the Gulf of Mexico disaster.

BP has settled two Gulf litigation cases that were due to be heard at trial. One was on issues of economic loss and medical compensation claims with those affected by the spill and was settled for $7.8bn.

A second was a $4.5bn deal with US authorities over criminal penalties, approved last week, in which BP admitted to the manslaughter of the 11 men who died.

BP will book a $3.85bn one-off charge in the quarter following the latest settlement, affecting its headline profits, and taking the total provision for the disaster to $42bn.

The company has yet to resolve civil penalties, due to be decided at a trial scheduled for February 25 in New Orleans.